Press Release: PMI(R) at 58.2%; November -2-

12/01/17 10:15 AM EST

The 14 industries reporting growth in production during the month of November -- listed in order -- are: Paper Products; Furniture & Related Products; Plastics & Rubber Products; Transportation Equipment; Machinery; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Printing & Related Support Activities; Computer & Electronic Products; Chemical Products; Primary Metals; Miscellaneous Manufacturing; and Nonmetallic Mineral Products. No industry reported a decrease in production in November compared to October.

 
Production   %Better  %Same  %Worse  Net  Index 
Nov 2017     33       59     8       +25  63.9 
Oct 2017     30       59     11      +19  61.0 
Sep 2017     31       59     10      +21  62.2 
Aug 2017     32       56     12      +20  61.0 
 

Employment

ISM(R) 's Employment Index registered 59.7 percent in November, a decrease of 0.1 percentage point when compared to the October reading of 59.8 percent. This indicates growth in employment in November for the 14th consecutive month. "Employment expansion remains strong in spite of signs of labor market tightening," says Fiore. An Employment Index above 50.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Of the 18 manufacturing industries, the 11 reporting employment growth in November -- listed in order -- are: Textile Mills; Machinery; Computer & Electronic Products; Transportation Equipment; Paper Products; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Chemical Products; Fabricated Metal Products; and Petroleum & Coal Products. Two industries -- Apparel, Leather & Allied Products; and Electrical Equipment, Appliances &

Components --   reported a decrease in employment in November. 
 
Employment   %Higher  %Same  %Lower  Net  Index 
Nov 2017     23       70     7       +16  59.7 
Oct 2017     25       68     7       +18  59.8 
Sep 2017     24       69     7       +17  60.3 
Aug 2017     26       67     7       +19  59.9 
 

Supplier Deliveries

The delivery performance of suppliers to manufacturing organizations was slower in November, as the Supplier Deliveries Index registered 56.5 percent. This is 4.9 percentage points lower than the 61.4 percent reported for October. "This is the 19th straight month of slowing supplier deliveries, and reflects delivery performance improvement over the prior month, but still insufficient to maintain raw material inventory levels," says Fiore. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.

The 10 industries reporting slower supplier deliveries in November -- listed in order -- are: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Paper Products; Machinery; Computer & Electronic Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Chemical Products; Miscellaneous Manufacturing; and Fabricated Metal Products. Three industries -- Furniture & Related Products; Primary Metals; and Electrical Equipment, Appliances & Components -- reported faster deliveries in November compared to October.

 
Supplier Deliveries   %Slower  %Same  %Faster  Net  Index 
Nov 2017              21       68     11       +10  56.5 
Oct 2017              26       69     5        +21  61.4 
Sep 2017              32       64     4        +28  64.4 
Aug 2017              18       78     4        +14  57.1 
 

Inventories*

The Inventories Index registered 47 percent in November, which is a decrease of 1 percentage point when compared to the 48 percent reported for October, indicating raw materials inventories contracted in November. "The inventory contraction reflects the continued difficulty of the supply chain to deliver materials and services meeting production schedules," says Fiore. An Inventories Index greater than 42.9 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).

The five industries reporting higher inventories in November are: Printing & Related Support Activities; Transportation Equipment; Machinery; Chemical Products; and Primary Metals. The 11 industries reporting lower inventories in November -- listed in order -- are: Wood Products; Textile Mills; Paper Products; Furniture & Related Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Fabricated Metal Products; Computer & Electronic Products; and Nonmetallic Mineral Products.

 
Inventories   %Higher  %Same  %Lower  Net  Index 
Nov 2017      16       62     22      -6   47.0 
Oct 2017      17       62     21      -4   48.0 
Sep 2017      22       61     17      +5   52.5 
Aug 2017      22       67     11      +11  55.5 
 

Customers' Inventories*

ISM(R) 's Customers' Inventories Index registered 45.5 percent in November, which is 2 percentage points higher than the 43.5 percent reported for October, indicating that customers' inventory levels were still considered too low in November. "The index remains at low levels and continues to contract, but November performance indicates that production output made some improvement in meeting customer inventory requirements," says Fiore.

Three manufacturing industries -- Furniture & Related Products; Miscellaneous Manufacturing; and Food, Beverage & Tobacco Products -- reported customers' inventories as being too high during the month of November. The eight industries reporting customers' inventories as too low during November -- listed in order -- are: Primary Metals; Electrical Equipment, Appliances & Components; Paper Products; Chemical Products; Computer & Electronic Products; Machinery; Fabricated Metal Products; and Transportation Equipment. Seven industries reported no change in customer inventories in November compared to October.

 
Customers'     %           %Too   %About  %Too 
 Inventories    Reporting   High   Right   Low  Net  Index 
Nov 2017       57          9      73      18    -9   45.5 
Oct 2017       54          9      69      22    -13  43.5 
Sep 2017       58          6      72      22    -16  42.0 
Aug 2017       55          5      72      23    -18  41.0 
 

Prices*

The ISM(R) Prices Index registered 65.5 percent in November, a decrease of 3 percentage points from the October level of 68.5 percent, indicating an increase in raw materials prices for the 21st consecutive month. In November, 37 percent of respondents reported paying higher prices, 6 percent reported paying lower prices, and 57 percent of supply executives reported paying the same prices as in October. "The Business Survey Committee noted price increases continue most notably in primary materials, including metals (steel, aluminum, copper, nickel based metals); basic and intermediate chemicals; corrugate, plastic resins and parts made from plastic resins," says Fiore. A Prices Index above 52.4 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Producer Price Index for Intermediate Materials.

Fifteen industries reported paying increased prices for raw materials in November, in the following order: Nonmetallic Mineral Products; Plastics & Rubber Products; Textile Mills; Machinery; Food, Beverage & Tobacco Products; Paper Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Transportation Equipment; Petroleum & Coal Products; Furniture & Related Products; Chemical Products; Primary Metals; and Computer & Electronic Products. No industry reported price decreases in November compared to October.

 
Prices     %Higher  %Same  %Lower  Net  Index 
Nov 2017   37       57     6       +31  65.5 
Oct 2017   43       51     6       +37  68.5 
Sep 2017   45       53     2       +43  71.5 
Aug 2017   30       64     6       +24  62.0 
 

Backlog of Orders*

ISM(R) 's Backlog of Orders Index registered 55 percent in November, the same level of expansion as the 55 percent reported for October, indicating growth in order backlogs for the 10th consecutive month. "Backlog expansion has stabilized during the period, consistent with October and at pre-Hurricane levels. This provides strong support to continued manufacturing expansion," says Fiore. Of the 92 percent of respondents who reported their backlog of orders, 25 percent reported greater backlogs, 15 percent reported smaller backlogs, and 60 percent reported no change from October.

The 11 industries reporting growth in order backlogs in November -- listed in order -- are: Apparel, Leather & Allied Products; Paper Products; Primary Metals; Furniture & Related Products; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Machinery; Petroleum & Coal Products; Computer & Electronic Products; Transportation Equipment; and Food, Beverage & Tobacco Products. The four industries reporting a decrease in order backlogs during November are: Wood Products; Fabricated Metal Products; Plastics & Rubber Products; and Miscellaneous Manufacturing.

 
Backlog of   % 
 Orders       Reporting  %Greater  %Same  %Less  Net  Index 
Nov 2017     92          25        60     15     +10  55.0 
Oct 2017     88          26        58     16     +10  55.0 
Sep 2017     89          29        58     13     +16  58.0 
Aug 2017     90          28        59     13     +15  57.5 
 

New Export Orders*

ISM(R) 's New Export Orders Index registered 56 percent in November, a decrease of 0.5 percentage point when compared to the 56.5 percent reported for October, indicating growth in new export orders for the 21st consecutive month. "All six big industry sectors continued to expand export activity during the period," says Fiore.

(MORE TO FOLLOW) Dow Jones Newswires

December 01, 2017 10:15 ET (15:15 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.